The Justice Department is passing up a chance to challenge a key court ruling it lost last month in its criminal case against two pro-Israel lobbyists accused of trafficking in classified information.

On Feb. 24, the 4th Circuit Court of Appeals upheld trial court rulings allowing the former employees of the American Israel Public Affairs Committee, Steven Rosen and Keith Weissman, to introduce classified FBI and State Department reports they contend are relevant to their defense. The pair, who have pled not guilty, are accused of conspiring to obtain classified information and relay it to journalists, diplomats and others.

The government had until last week to ask the full 11-judge en banc bench of the appeals court to take up the issues. There was some reason to think an en banc rehearing might be sought or granted, since the court's full bench used a similar situation back in 1985 to deliver a seminal en banc opinion on the use of classified information at trial.

However, this time, the government seems to have decided to stick with the hand they were dealt. A spokesman for the U.S. Attorney's office in Alexandria, Va., declined to comment beyond saying prosecutors would respond in court.

Why It Matters: By not asking for an en banc hearing, the government has removed one of the last obstacles standing in the way of a trial for Rosen and Weissman, who were indicted way back in 2005. They've had something like twenty trial dates scheduled and canceled since. Now they're on for June 2.

The prosecution is significant because Rosen and Weissman arguably did little more in gathering the allegedly classified information from government employees than many reporters do each day when they approach official sources. One official who provided information to the pair, Lawrence Franklin, pleaded guilty and is cooperating with prosecutors.

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President Obama's White House Counsel’s Office is in settlement negotiations to resolve two lawsuits over millions of official White House e-mails that may have gone missing during President Bush’s tenure.

In 2007, two groups, the National Security Archive and Citizens for Responsibility and Ethics in Washington, sued after reports emerged that some White House e-mails were not properly archived. The organizations demanded that all back-up media and hard drives be preserved until any missing e-mails were accounted for.

Court papers the Justice Department filed with a federal judge in Washington say that a settlement is under discussion.

“Additional time is required to allow the parties ample opportunity to explore whether the issues raised in these consolidated cases may be resolved through settlement rather than continued litigation,” the Justice Department wrote in a legal filing Friday. Earlier filings made no mention of the possibility of settlement.

“They reached out to us and sent us a smiley face,” Tom Blanton, the director of the National Security Archive, confirmed Monday in remarks to a conference on government secrecy and transparency at American University.

“We are working with lawyers from the White House and DOJ to try to find a way to resolve the issues without further litigation,” Anne Weismann, an attorney for CREW, told POLITICO. “I am cautiously optimistic but it is far too early to say for sure whether we will succeed.”

Spokesmen for the White House and the Justice Department had no immediate comment on the settlement talks.

Why It Matters: The cases had been highlighted as examples of how Obama was standing by the Bush Administration’s penchant for secrecy. There are plenty of examples of that, but the settlement talks show these White House e-mail suits don’t really fit that mold.

Josh’s Take: Press reports last month that the Obama Administration was adopting the defiant Bush strategy were overheated, in part due to a CREW press release which suggested that was going on, though never quite saying so. In fact, the only legal arguments against the cases after Obama took office were filed on January 21, 2009. That was one day after the inauguration, before many of the his new appointees were in place at Justice, and the very same day Obama issued a directive promising “an unprecedented level of openness in government.”

“I basically took that [court] filing as a kind of sucker punch by the Department of Justice on the new Obama people--but they’re responsible for it,” Blanton said Monday. “Somebody in the transition process agreed to that.”

Historical Note: The first indications that about the e-mail problems came in 2006 when a court filing in the prosecution of vice presidential aide Lewis Libby showed that the special prosecutor on the case, Patrick Fitzgerald, said his investigators had determined that not all White House emails were properly archived.

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Welcome to my new blog devoted to stories that have not yet broken through in the mainstream press or just aren’t getting the attention they deserve. I also plan to use this space to indulge my own interests in the courts, the Justice Department, the First Amendment, classified information, campaign finance, transparency, and open government laws like the Freedom of Information Act.

Since I’m currently covering the White House for POLITICO, you’ll probably see a smattering of posts about doings there or by the Obama Administration more broadly.

I do plan to point out when people in the public eye don’t appear to be living up to their words and promises. That said, I also hope to inject a tad of humor here from time to time. Or at least what I think passes for humor.

If you have thoughts on stories that are flying under the radar, I hope you’ll consider sending them along to me at jgerstein@politico.com. And don’t hesitate to be in touch if you think I’ve gotten something wrong or if you just want to offer another perspective.